KAMPALA, June 16, 2025 – – Uganda’s former power distributor, UMEME Limited has posted a net loss of Shs 511 billion for the financial year ended December 31, 2024, concluding a difficult final year in its 20-year electricity distribution concession in Uganda. The concession reached its natural end in March 2025, initiating a complex transition process that significantly affected the company’s operations and financial position.
“This marks the 20th and final year of the company’s electricity distribution concession in Uganda. The concession naturally expired in March 2025,” the Board of Directors noted in UMEME’s audited financial results.
Throughout 2024, the company was heavily engaged in critical transition activities involving staff redeployment, ICT system changes, asset handovers, and ensuring continuity of service. These efforts, combined with the unresolved recovery of outstanding claims from the government, placed considerable strain on the company’s financial performance.
“The conclusion of the concession, related transition activities, and their consequences have had a substantial adverse impact on the company’s overall performance,” the Board stated. “The key challenges included reduced staff productivity, higher operating expenses, and significant provisions for financial assets awaiting final determination.”
Uganda’s broader macroeconomic environment compounded the difficulties, with inflationary pressures, regulatory constraints, and increased financing costs further weighing on operations. Despite maintaining safety as a core focus, the company reported 18 fatal incidents, largely linked to unauthorised electricity use, poor household wiring, and infrastructure vandalism.
Amidst these challenges, electricity demand rose by 10.8 percent to 4,674 gigawatt-hours [GWh], driven by higher grid connectivity and increased economic activity. UMEME connected 219,656 new customers during the year, bringing its total customer base to 2.2 million. Notably, energy losses fell to a historic low of 16 percent—an impressive drop from 38 percent at the start of the concession in 2005.
Operating costs per kilowatt-hour sold rose by 18.2 percent, reflecting expanded operational requirements and the demands of concession closure. The company also completed several key infrastructure upgrades, including enhancements to substations in Hoima and Jinja, and the installation of dedicated power lines to regional referral hospitals.
On the digital front, UMEME launched its new Yaka Management System in December 2024, which integrates multiple billing and customer service platforms.
“The system significantly improves customer experience, revenue assurance, and staff efficiency,” the company noted.
Revenues grew by 5.4 percent to Shs 2.3 trillion, supported by the rise in electricity sales. However, the company made provisions totalling Shs 329 billion for disputed financial assets linked to the Buyout Amount under the concession agreement with the government.
“In accordance with IFRS [International Financial Reporting Standards ] accounting standards, we made provisions for the disputed and unadmitted portion of the Buyout Amount,” the Board explained. “UMEME has resolved to pursue recovery of this amount through arbitration in London, United Kingdom.”
Amortisation costs surged to Shs 699 billion, while expected credit losses rose sharply from Shs 1.6 billion to Shs 361 billion. As a result, total assets declined from Shs 2.35 trillion in 2023 to Shs 1.39 trillion in 2024. However, finance costs fell by 35 percent to Shs 29 billion following the full repayment of term loans in 2023.
The company reported an income tax credit of Shs 92 billion, compared to a tax charge of Shs 3.9 billion in 2023, attributed to the substantial loss and related provisions.
No dividend was declared for 2024, reversing the previous year’s payout of Shs 54.2 per share.
Following the formal handover of the electricity distribution network to the Uganda Electricity Distribution Company Limited [UEDCL] on March 31, 2025, UMEME is now focused on recovering the remaining Buyout Amount.
“As stated in our public notice of June 2, 2025, the Company is pursuing the outstanding buyout amount of US$ 292 million [approximately Shs 1.051 trillion], plus contractual interest, through international arbitration,” the Board confirmed.
https://thecooperator.news/umeme-suspended-from-use-after-handover-to-uedcl/
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